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The Trump Administration issued two rules rolling back the federal requirement that employers include birth control coverage in their group health plans. Here’s what you need to know.
The Departments of Health and Human Services, Treasury, and Labor, under the direction of President Trump, issued two interim rules effective October 6 that rolled back the federal requirement that employers include birth control coverage in their group health plans.
The ACA required contraceptives to be provided without cost sharing under its preventive services requirement, with only limited exceptions and accommodations for religious organizations.
The mandate resulted in years of lawsuits based on religious and moral objections, says Suzanne Spradley, senior vice president, associate general counsel, chief compliance officer, NFP, an insurance broker and consultant.
1. The rules offer new exemptions. One of the new rules offers an exemption to any employer or insurer that objects to covering contraceptive services based on its sincerely held religious beliefs. A second rule offers a new exemption to employers that have moral convictions against covering contraceptives. “The rules are effective immediately, since the administration did not feel it was in the public’s interest to delay implementation with a public comment period first,” says Kim Buckey, vice president of client services, DirectPath, an employee engagement, healthcare transparency, and compliance firm for Fortune 1000 employers.
Trump is acting on a statement he made on May 4 targeted to his base, when he said, “We will not allow people of faith to be targeted, bullied, or silenced anymore.” The administration has cited health risks associated with certain forms of contraception and says that providing free contraception could promote “risky sexual behavior” among young people, and further stated its desire to end more than five years of lawsuits over the contraception coverage mandate, Buckey says.
2. Multiple types of employers can quality for exemptions. Since 2011, most employers have been required to include contraceptive coverage in their group health plans. There was a limited exemption for churches and an accommodation process for nonprofit religious organizations and closely held for-profit corporations that allowed them to opt out of providing such coverage in their group health plans while requiring insurers and third-party administrators to offer such coverage to participants of the plan.
Now, Spradley says, all nonprofits and closely held for-profit entities, along with private institutions of higher education that offer student health plans and publicly traded for-profit companies, may qualify for the exemption if they object to offering contraceptive coverage based on religious beliefs. An exemption is also available for these entities, except the publicly traded for-profit entities, if they object based on moral grounds.
Employers that object to providing contraceptive coverage may simply refuse to offer such coverage or they can continue to offer the accommodation process currently in place that permits employees to get contraceptive coverage through the employer’s insurer without the employer paying for it, Spradley says. If an employee has an employer that chooses the former-to simply refuse to offer such coverage-they will have to decide whether they want to enroll in the group health plan or seek coverage through a health plan offered in the individual market.
Insurers may also be exempt based on a religious exemption, although this seems less likely and would require the insurer’s exemption to line up with the employers for whom it provided group health coverage.
3. Not very many employers are expected to take advantage of the new rulings. The administration reportedly expects few employers to take advantage of the ruling-probably just the companies that had brought suit against the former rules. Spradley reports that the departments concluded that less than 0.1% of the 55.6 million women covered by private group health plans will be affected by the new rules.
Most large employers will not make any changes to their current coverage of contraception, at least in the short term. “The employee relations repercussions of such a takeaway could be substantial and affect their ability to attract and retain talent,” Buckey says.
4. Preparing now will ease headaches later. Health insurers should be prepared for some of their clients to inquire about or insist on dropping contraception coverage immediately. “If an insurer typically assists employers with communications about benefit changes, it may want to begin preparing materials announcing the change to affected employees,” Buckey says. It’s worth noting that if a plan intends to drop contraceptive coverage, the ACA requires that it provide 60 days advance notice of the planned change.
Karen Appold is a medical writer in Lehigh Valley, Pennsylvania.